Dear Roshi,

To set up an HR DEPT, the following things should be kept in mind.

1) Recruitment and selection (i.e. job descriptions, selection tools, background checks, offers)
2) Compensation (i.e. methods, consistency, market)
3) Employee relations (i.e. labor agreements, performance management, disciplinary procedures, employee recognition)
4) Mandated benefits (i.e. social security, , worker's compensation, )
5) Optional group benefits (i.e. insurance, time off benefits, flexible benefits, retirement plans, employee assistance programs, perks)
6) Payroll (i.e. internal vs. external options, compliance)
7) Recordkeeping (i.e. HRIS, personnel files, confidential records, other forms)
Training and development (i.e. new employee orientation, staff development, technical and safety, leadership, tuition reimbursement, career planning)
9) Employee communications (i.e. handbook, newsletter, recognition programs, announcements, electronic communication)
10) Internal communications (i.e. policies and procedures, management development, management reporting)

Roshi,

The first step is to determine what the expectations are of the manager who realized the necessity of HR function.

After that, determine the compliance issues which pertain to your company. The most basic of these have to do with wages and hours of work, classification of employees, leaves of absence including maternity leaves, harassment, and others.

Then, determine whether or not you need to have an employee handbook or other formal policies and procedures manual to cover everything from establishing the company as an at-will employer to benefits. If a handbook already exists, be certain that it is in compliance with state regulations and that the policies and the way they are written are in the best interests of the company.

Are all the basic policies included? These can be thought of as grouped into conditions of employment, benefits, and disciplinary processes. Is there a balance between stated corporate and employee rights and obligations?

Take a look at existing employee files or, if no files exist, gathering all the papers into coherent personnel files. Minimally, you should have an Application for Employment form or resume, , any insurance forms that the employee may have signed, and performance appraisals.

Who takes care of payroll? There used to be an ongoing fight between HR and accounting as to who gets payroll.. So make sure of this point to have a clear picture on this.

One person should be responsible for new employee orientation. In order to inform new employees of their benefits and the policies of the company, you will very simply have to be the expert in benefits and policies of the company.

HR has an information function that you should think through. Changes in policies, changes in benefits, even changes in laws must be communicated to all employees. Major changes may call for training such as in harassment a few years back. Therefore, HR becomes a kind of pass-through in the information cycle.

Hope this clarifies.

Regards,

Michael Coutinho